Bank Of America Sees More Than Healthcare In Axia Acquisition

On the surface, it appeared as a typical acquisition. A bank, Bank Of America, acquires a healthcare payments platform, Axia Technologies, to strengthen its patient/provider payments capabilities. Under the surface, it was more: a cornerstone for expanding its merchant service offerings in healthcare beyond payments processing.

“It’s not just about the payment,” Mark Monaco, head of enterprise payments at BoA, told PYMNTS. “It’s about the integrations into the software that drive these healthcare enterprises.”

Axia was founded in 2015. Its core product, AxiaMed, provides a gateway and software solution that helps healthcare providers manage patient payment from end to end, improving provider cash flow and streamlining back-office reporting reconciliations.

According to Monaco, the acquisition is also a tip of the hat to the rapid changes that have marked the past year in banking and financial services, particularly for Bank of America. Being customer-focused means “controling its own destiny” by adding the right infrastructure to support a complete payments ecosystem. Healthcare is a key vertical in building out that strategy.

Monaco said that an addition like Axia to its portfolio helps it provide better payments service to both consumers and merchants. “Often in payments, it’s a ‘you win, I lose’ ” proposition, he said. However, Bank Of America is attempting to create more parity on both sides of the equation, especially considering the sheer size of the bank and the range of clients.

Merchant Services Extension

As he alluded to, the acquisition is also about expanding BoA’s merchant services platform. Once upon a time, the merchant services platform was something of an afterthought at the bank but has become one of its top priorities. Today, Monaco said, the bank’s merchant services platform leverages real-time payments and digital capabilities to complement standard functions such as merchant acquiring, payments processing and settlement, data analytics and security solutions.

“If we’re talking about the merchant space, companies largely grew up on one side of the other — as an acquirer or an issuer,” he said. “Now you’re seeing some of that change, particularly as we get into both acquiring and issuing, but we take it even broader than that — moving beyond just card-based transactions. We’re thinking holistically.”

One of the aspects to be deployed across Bank Of America’s expanding merchant services platform will be real-time payments, which may help improve some of the current friction around medical payments. As cited in the recent Healthcare Innovations Playbook, 34.2 percent of consumers said insurance covered their entire bill for healthcare visits. The research also showed that 29.3 percent said they paid a copay and insurance covered the rest.

Beyond solving this difficulty, Monaco says that real-time payments usage can have a greater impact in all of the bank’s merchant services verticals.

“Real-time payments don’t just speed working capital,” he said. “I think that’s a little bit of a false notion. It also enables more precise management of working capital. Real-time doesn’t always mean pay now, it means pay when you decide to pay.”

Axia will also bring with it a host of other omnichannel payment solutions. The company offers scan and pay services where customers can scan a QR code on their bill using a mobile device and be taken to a portal to easily pay their bills. It can also enable custom-built online and mobile ePayment forms and offer text and pay services — all of which are highly secure and HIPAA compliant.

While it will take some time to see just how the Axia acquisition shapes Bank Of America’s presence in the healthcare vertical, Monaco said it could only improve client and customer relationships, which is a cornerstone of the company’s client services expansion that goes beyond simple P&L.

“None of us really know where the payments ecosystem is going,” he said. “We know that there’s a lot of change afoot. And we’re obviously a big player in all aspects of payments. Having an infrastructure that allows us to adapt and respond to some of those changes that might occur is important.”